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What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • Fed Meeting Takeaways
  • What the Fed Meeting Means for Markets

Stock futures are lower and oil is back above $100/barrel this morning amid negative comments from Russia about Ukraine negotiations while the yield curve continues to flatten post-Fed.

This morning, the Kremlin said that reports of progress in talks are “wrong” and Biden saying Putin is a “war criminal” is “unforgivable” which has sparked risk off money flows over the last hour.

Economically, Eurozone HICP rose 5.9% vs. (E) 5.8% Y/Y bolstering concerns about high inflation which has further flattened the yield curve in early trade.

Today, we will get several important economic reports including: Jobless Claims (E: 218K), Housing Starts (E: 1.70M), Philadelphia Fed Manufacturing Index (E: 15.0), and Industrial Production (E: 0.5%). There are no Fed speakers today.

Bottom line, the Fed is continuing to be digested today but focus has largely returned to Russia-Ukraine. And if the odds for a peace deal deteriorate meaningfully, expect at least a portion of yesterday’s big rally to be given back. Additionally, if economic data continues to indicate stagflationary trends emerging, risk assets could trade with a heavy tone.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on March 9, 2022

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U.S. oil futures settle with a loss of more than 12%

U.S. benchmark oil remains overbought and could continue to pullback towards an initial support zone between $107 and $112…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on March 7, 2022

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Gold prices log highest finish in more than a year and a half

Ongoing concerns about price pressures and Fed policy expectations being dialed back slightly due to geopolitics are both strong tailwinds behind gold here…analysts at Sevens Report Research wrote. Click here to read the full article.

 

Market Multiple Table: March Update

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What’s in Today’s Report:

  • Market Multiple Table: March Update

U.S. futures fell sharply overnight following Russia’s threat to shut the Nord Stream 1 pipeline and the U.S. expressing a willingness to ban imports of Russian oil. But reports of successful evacuations from Ukraine through a corridor agreed upon with Russia has sparked risk on money flows in pre-market trading.

Economic data in Europe was generally good o/n with German Industrial production topping estimates while Eurozone GDP met expectations. Domestically, the NFIB Small Business Optimism Index fell to 95.7 vs. (E) 97.1.

Today, there is one economic report to watch: International Trade in Goods & Services (E: -$84.0B), however, it should not move markets, while the Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET.

Bottom line, the market is attempting to stabilize this morning following yesterday’s route, but for the market to bounce further, we will need to see meaningful de-escalation between Russia and Ukraine over the course of the day.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Oil Market Update and EIA Analysis

Futures are slightly lower following a mostly quiet night of news as the world awaits the results of the latest peace talks today between Russia and Ukraine.

Russia continued its bombardment of Ukraine’s cities while another round of peace talks will occur today.

Economic data was slightly underwhelming as Chinese, UK, and EU February composite PMIs slightly missed estimates.

Today’s focus will be on the Ukraine/Russia peace talks and if a cease-fire is agreed to, that will cause another knee-jerk rally in stocks.

Beyond geopolitics, we also get several important economic reports today.  The key report is the ISM Services PMI (E: 60.9), and markets will want to see stability in those numbers.  We also get Jobless Claims (E: 232K) and Unit Labor Costs (E: 0.3%).  The later is a notable inflation indicator and if it’s “hot” that could weigh slightly on stocks.

Finally, we get the second half of Powell’s testimony (10:00 a.m. ET), although we likely won’t get any surprises.   Barkin (12:00 p.m. ET) and Williams (6:00 p.m. ET) also speak today but shouldn’t move markets.

Why We Could See a Short Term Rally (But We Wouldn’t Chase It)

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What’s in Today’s Report:

  • Why We Could See a Short-Term Rally
  • What the FOMC Minutes Meant for Markets (Not as Hawkish as Feared, But Not Dovish, Either)
  • EIA and Oil Market Update

Futures are modestly weaker as negative headlines on Russia/Ukraine weighed on sentiment.

Russia accused Ukraine of attacking Russian-back separatists in the Dontesk region of Ukraine, and analysts fear this could be the pretext for a larger military conflict if Russia moves to annex Dontesk, (this would be a replay of what happened with Crimea in 2014).

Russia/Ukraine headlines are driving short term trading and that will remain the case today, with any headlines implying diplomacy causing a rally, and any headlines implying conflict causing a sell off.

Beyond geopolitics, however, we get several pieces of economic data, including Jobless Claims (E: 224K), Housing Starts (E: 1.708M) and the Philadelphia Fed Manufacturing Index (E: 19.7) and as has been the case the market will be looking for stability in the data.

Finally, we also get two Fed speakers, Bullard (again) at 11:00 a.m. ET and Mester at 5:00 p.m. ET.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Why Surging EU HICP Matters to Us
  • EIA Analysis and Oil Market Update

Futures are sharply lower following a big earnings miss by Facebook (FB was down 20% after hours).

FB posted disappointing margins and guidance and the steep decline in the stock is pulling futures lower.

EU and UK Composite PMIs were mixed as the EU reading slightly missed while the UK PMI beat estimates, although neither number is moving markets.

Today will be a busy day.  First, we get two central bank announcements (BOE at 7:00 a.m. and ECB at 7:45 a.m.).  The BOE is expected to hike rates 25 basis points and while there’s no change expected to ECB policy if Lagarde is hawkish at her press conference that will add to the earnings-inspired declines.

We also get some notable economic data, including the ISM Services PMI (E: 59.9), Jobless Claims (E: 250K), and Productivity and Costs (E: 2.4%, 1.7%) and as has been the case, markets will crave stability to ward off stagflation fears.

Finally, on the earnings front, AMZN ($3.88) after the close is the big report today.  Of the super cap tech stocks, we’re had some good reports (AAPL/MSFT/GOOGL) and some bad reports (NFLX/FB), and markets need AMZN to land in the former.  Beyond AMZN, some other reports we’ll be watching include: MRK ($1.52), LLY ($2.51), COP ($2.20), HON ($2.08),  SNAP ($0.10), and F ($0.43).

Sevens Report Co-Editor Tyler Richey Quoted by MarketWatch on January 27, 2022

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Natural-gas futures jump by more than 46%; oil settles lower

The 219 billion-cubic-foot weekly fall in U.S. supplies of the fuel reported by the Energy Information Administration Thursday leaves stockpiles more than 10% below last year’s levels…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on January 21, 2022

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Oil prices finish lower, but tally a 5th straight weekly gain

A surge in risk-off money flows in the back half of the week have caused oil futures to give back the bulk of this week’s gains…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on January 10, 2022

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Oil ends lower as traders weigh supply disruptions and omicron’s threat to energy demand

Supply concerns continue to linger after production and pipeline outages overseas buoyed prices last week…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.